Ed Balls today attacked George Osborne’s Autumn Statement as “unfair, incompetent and totally out of touch”. The shadow chancellor slammed the Coalition mini-budget and said it showed the “full scale of this government’s economic failure”.

In a swipe at his Tory opponent Mr Balls said Mr Osborne was delivering a slower economic recovery “than at any point in the last hundred years”.

With the Chancellor set to signal that Britain’s age of austerity will have to last longer than previously feared, Mr Balls said the “defining purpose” of the Government is now “in tatters”.

Mr Balls said: “Today — after two and a half years — we can see the full scale of this government’s economic failure. Our economy stagnant this year, government borrowing and the deficit revised up. £212 billion more borrowing than he planned two years ago.

"The national debt rising — not falling. And it is people who are already struggling to make ends meet — middle and lower income families and pensioners — who are paying the price.”

He said: “The defining purpose of this government, the cornerstone of this coalition, the one test they set themselves — to balance the books and get the debt falling by 2015 — is now in tatters.”

Mr Osborne yesterday told Cabinet colleagues that he is releasing £5 billion for capital projects, mainly funded by cutting Whitehall departmental spending by one per cent next year and two per cent the following year.

But Mr Balls today warned that the economy will keep tanking under the Government’s plans.

He said: “Far from securing the recovery, our economy has flat-lined since the Spending Review in 2010. Over the last two years the Chancellor was expecting our economy to have grown by 4.6 per cent.

“But it has actually grown by just 0.6 per cent, compared with 1.7 per cent in France, 3.6 per cent in Germany, and 4.1 per cent in America.

“After the longest double dip recession since the Second World War, this Chancellor is now delivering a slower recovery than at any point in the last hundred years.”

Mr Balls also criticised Mr Osborne for attempting to blame the UK’s bleak economic forecasts on the eurozone crisis.

He said: “Once again the Chancellor is trying to blame high oil prices and the eurozone crisis, which affected countries round the world. So why over the last two years has Britain grown by just one tenth of the average growth rate of the G20 countries?

“And who will pay the price for his failure? Not the 8,000 millionaires who are set to receive an average tax cut of over £100,000 each in April next year.”

Mr Osborne will announce a series of measures to clamp down on tax avoidance, having this week pledged

£154 million to help catch tax dodgers. The Chancellor will order Inland Revenue officials to use the cash for investigators to target high earners who aggressively avoid or evade paying tax.

She said: “It’s a little bit smoke and mirrors because they are making huge cuts to HMRC during the course of this parliament and thousands of tax inspectors are losing their jobs and will do by the next general election. He is taking with one hand and giving with the other.”